The economic downturn has put the brakes on private publishing company ITP's rapid expansion, but it still continues to grow.
ITP slows expansion, but no layoffs
The economic downturn has put the brakes on private publishing company ITP's rapid expansion, but not enough to stop its growth or require layoffs. While showing off a copy of the company's newest title, Men's Fitness, which launched today, chairman Andrew Neil and group managing director Robert Serafin said the days of launching several magazines a month may be gone, but that the company was still forecasting modest additions to its list of 103 titles next year.
"Growth is slowing dramatically, but there is still growth," Mr Serafin said. Part of the reason for his cautious optimism is that only 8 per cent of the company's revenues come from property companies, which have been pulling back their advertising across all media, particularly print. The company employs more then 600 staff in offices in Dubai's Garhoud area, Dubai Media City, Dubai's International Media Production Zone, Manama in Bahrain and Mumbai in India. It is planning to launch the second of three new Indian titles this month. It is expanding its offices in Dubai and is planning to open offices in Abu Dhabi's new media zone, twofour54, in the next couple of months.
"We won't be launching as many magazines I think next year, because economic conditions have changed," Mr Neil, a former editor of The Sunday Times and The Economist, said. "But for any company that has grown as quickly as we have, just like Dubai itself as a city-state, there comes a time when you have to pause, draw breath, consolidate and go on again." The company would be more cautious in considering what titles it did launch, Mr Serafin said. "There are four or five strategic gaps that we are going to fill next year. If it's not strategic, we're probably not going to launch it. This year we would have launched it."
Some consolidation has already begun. The company closed two of its business-to-business titles, Middle East Dentist and Middle East Medical Times, last week, a move that Mr Serafin attributed more to the UAE's strict regulatory environment for health-care publications than a reduction in advertising. He said that there would be "adjustments" to four or five other titles in the next year, but added that such changes would be nothing new for the company, which has been operating for 21 years. "I don't think there has been a year that we haven't closed one," he said.
But that does not mean ITP workers should worry about losing their jobs. "To add the magazines we have, you always have to hire more people, but in a way, we never hire the numbers you would think," Mr Neil said. "In addition to bringing more people in, we get more from the existing people, which means the productivity of the company rises, and that again generates more cash as a result. So when a downturn comes - and a downturn here means slower growth than before, not an actual downturn - it means that we don't have to go and fire lots of people, because we're very efficient."
But such efficiency has caused much grumbling from former and present ITP staff members of the weblog community. Mr Neil brushes it aside, saying it is normal for detractors to attack the market leader particularly when that leader is a private company. "There is no legal penalty to attacking us," he said "They may think twice about attacking institutions that are run by the state, or by powerful Emiratis."
Both men also dismissed speculation that ITP was seeking a buyer. "For the last seven years, there has probably been one approach a month to ITP to sell the company," said Mr Serafin, adding that he was always polite when declining these advances. "If we carry on as well as we are doing, the company will be worth a lot more in three years' time, so why rush?" Mr Neil said. "If we can carry on the scale that we are heading towards, there's no reason that this can't be a billion-dollar company." firstname.lastname@example.org